The rule
An offer communicates a commitment whose invited acceptance completes the bargain. Determine whether the sender reserves further assent. Public offers can define eligible acceptors, and goods agreements can leave terms open subject to intent and a sufficiently certain remedial basis.
Elements
- A communicated proposed bargain.
- A recipient or class capable of the invited acceptance.
- Sufficient commitment and definiteness under the governing law.
Exceptions and limits
- An open price does not override an intention not to be bound before price agreement.
When the issue arises
Compare a quotation, catalog, negotiated proposal or reward announcement with the response claimed to accept it. Identify the actual document and conduct rather than labeling the whole exchange an offer.
Who still controls the final decision?
Lonergan's price and property details did not eliminate the form-letter context and warning about another expected buyer. The seller had not given this recipient the final power to close by agreement alone.
Lefkowitz's specified stole and first-customer condition did confer a defined opportunity to accept. Its public advertisement was not disqualified just because many people could read it; the promise itself controlled who could complete the bargain.
Specific terms and serious commitment are separate
Leonard independently examined the advertisement's reservation of redemption details and the objective absurdity of the jet scene. Making a price specific would not by itself fix either a reserved final decision or a communication no reasonable recipient would treat as serious.
Do not infer that every extraordinary discount is a joke. Use the whole communicated context, including the acceptance conditions and the distinction between an attractive promotion and an evident fantasy.
An open term need not mean an open decision
For goods, 2-204 permits agreement despite an uncertain formation moment or open terms when intent and a reasonably certain remedial basis exist. Section 2-305 separately permits an unsettled price in specified circumstances.
The price rule also preserves the opposite intention: if the parties mean not to be bound before fixing or agreeing a price, failure to do so means no contract under 2-305(4). A statutory gap filler does not override that reservation.
A simple fact pattern
Facts. A landowner writes that a form letter lists the price and location, and asks the recipient to submit a proposal because another buyer may decide soon. The recipient sends an acceptance of the listed price.
Analysis. The reservation of another decision supports preliminary negotiation under Lonergan. The reply may itself propose a bargain, but it cannot exercise a power the earlier communication did not confer.
A harder fact pattern
Facts. A store advertises one identified display item for $99 to the first customer at the counter Saturday morning. The first customer tenders $99, and the manager invokes an unadvertised eligibility rule. Assume the sale was presented seriously and no separate defense applies.
Analysis. Lefkowitz supports treating the specific item, price and first-customer condition as an offer accepted by the requested performance. The manager cannot simply add a new eligibility condition after that acceptance; damages still require their own proof.
Leading cases
Lonergan v. Scolnick
A newspaper ad and a form letter that answer questions about property are invitations to deal, not an offer, so a buyer who says yes cannot create a contract by accepting them.
1957Lefkowitz v. Great Minneapolis Surplus Store, Inc.
An advertisement that is clear, definite, and explicit, and that leaves nothing open to negotiation, is an offer that the first person to accept can enforce.
1999Leonard v. Pepsico, Inc.
The Harrier commercial failed as an offer, failed the objective seriousness test, and lacked a signed writing satisfying the statute of frauds. Those were separate grounds for rejecting Leonard's contract claim.
Compared with nearby doctrines
| Doctrine | How it differs |
|---|---|
| Objective theory of assent | The communication's meaning determines whether final commitment has been made. |
| Acceptance | The offer defines the response that can complete the bargain. |
Common exam mistakes
- Requiring an offer to name only one person, thereby excluding public rewards.
- Treating every price statement as either always binding or always preliminary.
- Using an open-price rule despite a reservation against being bound.
- Concluding that a stated discount alone proves either seriousness or a joke.
Practice questions
A land seller sends a form letter giving a location and price, explains that further assent is needed, and warns that another prospective buyer may decide shortly. The recipient replies that it accepts the listed price. Under Lonergan's reasoning, which is best?
Answer and explanations
Correct answer: D.
Authority: Lonergan: further assent and preliminary negotiation
- A. Wrong. Price does not eliminate the communicated reservation of another decision.
- B. Wrong. The actual language and context determine what the form conveys.
- C. Wrong. Examine communicated commitment, not a private reservation alone.
- D. Correct. Lonergan examines the form-letter context and further assent. The recipient cannot accept a power the seller did not confer.
More contracts practice questions and essays
Quick answers
Must an offer be addressed to one named person?
No. A public promise can define who may accept and what they must do, as the first-customer condition did in Lefkowitz.
Can Article 2 fill a price the parties never agreed?
Section 2-305 can supply a reasonable price where the parties intend to contract, but it also preserves an intention not to be bound until price is fixed.
Does proving an offer establish damages?
No. Formation, enforceability and amount of relief are separate. Lefkowitz distinguished the proved stole loss from insufficient proof about the coats.